Today's Headlines

Bloomberg:

• Russian Rating May Fall to Junk in Economic Crisis, Kudrin Says. Russia’s sovereign debt rating will tumble into junk territory next year as the country plunges into a “full-fledged economic crisis,” former Finance Minister Alexei Kudrin said. Gross domestic product may contract by at least 2 percent in 2015, while inflation will accelerate to 12 percent to 15 percent, Kudrin told reporters in Moscow today. Russia failed to make changes to the economy during “quiet years” and now must face the current crisis unprepared, said Kudrin, who served as finance minister for more than a decade until 2011. 

• Bank of Russia Pledges to Bail Out Trust as Ruble Crisis Hits. Russia’s central bank pledged as much as 30 billion rubles ($531 million) to support National Bank Trust after the ruble plunged and liquidity tightened. The central bank is selecting an investor to help shore up the lender, and the Deposits Security Agency will take over its management, Bank of Russia said in a statement today. The ruble has depreciated 38 percent against the dollar since June, and volatility has soared to the highest since Russia defaulted on local-currency debt 16 years ago, stoking concern that Russian lenders’ asset quality has deteriorated.

• Ruble’s Rescue Comes With Cost for Russian Economy. Russian policy makers are signaling they’re prepared to sacrifice economic growth in order to stabilize the ruble. The Bank of Russia raised its benchmark interest rate by the most in 16 years last week and created a money-market cash squeeze, helping the ruble strengthen 45 percent from a record low on Dec. 16. The consequence of this means the oil producer’s economy may shrink 7.9 percent in 2015, Danske Bank A/S said on Dec. 19, revising a view for a 1.8 percent contraction. 

• China Stock-Manipulation Probe Spurs Concern on Small-Cap Rally. An investigation into stock market manipulation in China is spurring concern of further losses for shares of smaller companies after a benchmark gauge plunged by the most in a year. The China Securities Regulatory Commission is probing companies and individuals involved in suspected market manipulation on 18 stocks and has set up a task force, the regulator said in a Dec. 19 statement on its microblog, citing an unnamed spokesman. Most of these stocks are small companies listed in Shenzhen, according to the statement.

• Brazil Economists Cut GDP and Raise Inflation Forecasts for 2015. Brazil economists cut their gross domestic product forecast and raised their inflation estimate above the official target range as deteriorating confidence will present a challenge for the government’s new economic team. Analysts reduced to 0.55 percent their GDP estimate for 2015 from 0.69 percent the previous week, according to the Dec. 19 central bank survey of about 100 analysts published today. Analysts also cut to 0.13 percent the estimate for growth this year, from 0.16 percent last week.

• European Stocks Advance for Fifth Day as Lenders Lead. European stocks advanced for a fifth day, with banks contributing the most to the gains. The Stoxx Europe 600 Index rose 0.5 percent to 341.97 at the close of trading in London, after earlier adding as much as 0.9 percent.

• Copper Futures Fall on ‘Disappointing’ Drop in U.S. Home Sales. Copper futures for March delivery fell 0.4 percent to settle at $2.8725 a pound at 1:10 p.m. on the Comex in New York. This year, the price has declined 15 percent amid concern that global mined supplies will top demand as the economy cools in China, the largest user.

CNBC:

• Nat gas collapses—‘This is panic selling’. (video)

ZeroHedge:

• Belarus In Full-Blown Hyperinflation Panic: Blocks News, Online Stores; Bans All FX Trading For 2 Years. (graph)

• Bloomberg's Commodity Index Drops To Lowest Since 2009: What Does It Mean?

• Bank Revenues Plummet 17% In October And November According To Citi.

• The Fed Is Running On The Final Fumes Of Its Credibility.

• Existing Home Sales Collapse Most Since July 2010, Downtick In Stock Market Blamed. (graph)

• Grow Your Way Out Of Debt? Don't Make Us Laugh...!

• WTI Crude Plunges Back Below $56, Nasdaq Red On Gilead Weakness. (graph)

• Treasury Surge Set To Continue: Hedge Funds Most Short The 10-Year In Three Years.

Business Insider: 

• South Korea's Nuclear Plant Operator Has Been Hacked.

• Western Journalist: ISIS Is 'Much Stronger And Much More Dangerous' Than People Realize.

MEES:

• Saudi's Naimi Says $20 Oil 'Irrelevant' to OPEC Policy. "Whether it goes to $20/b, $4-0/b, $50b, $60/b, it is irrelevant," Saudi Arabian Oil Minister Ali Al-Naimi said when asked what price would prompt OPEC to cut output. Naimi was asked in interview whether OPEC would maintain output even if prices were to drop to $40-$30/bbl. Naimi said Russia indicated it was unable to cut production during talks with Saudi, Mexico, Venezuela last month. Naimi said Saudi oil production costs are $4-$5/bbl at most.